Weekly Economic Update
Presented by Troy L Thompson, CFP, October 17,
2018
UNCERTAINTY BREEDS SELLING,
FOLLOWED BY A RELIEF RALLY
On Friday, Wall Street rebounded from a
disquieting slump that saw the blue chips take an almost 1,400 point dive. The S&P 500 gained 1.42% to snap a
6-session losing streak, the Nasdaq Composite rose 2.29% to fight back from a
correction, and the Dow rose 1.15%. A new earnings season may take investors’
minds off the insecurities they have felt recently about bond yields, tariffs,
and interest rate hikes. Those uncertainties weighed on equities again this
past week: the Dow fell 4.19% to 25,339.99; the S&P, 4.10% to 2,767.13; the
Nasdaq, 4.86% to 7,496.89. Small caps had it worse than the big three last
week: the Russell 2000 lost 5.23%.1,2
INFLATION
SOFTENED LAST MONTH
Advancing only 0.1% for September, the headline Consumer Price
Index showed a yearly gain of 2.3%, quite a contrast from the 2.9% increase
measured in July. The core CPI also advanced 0.1%, and its 12-month gain was
unchanged at 2.2%. If further deceleration in the annual inflation rate occurs,
that might give the Federal Reserve some pause.3
A
LITTLE LESS CONFIDENCE ON MAIN STREET
The latest University of Michigan consumer sentiment index fell
short of the heights forecast by economists surveyed by Briefing.com. They
expected a preliminary October reading of 100.0. Instead, the index fell to
99.0, 1.1 points below its final September mark.4
SOCIAL
SECURITY BENEFITS WILL GROW 2.8% IN 2019
Retirees will soon see a boost in their Social Security payments.
Thursday, the Social Security Administration announced that retirement benefits
will receive their largest cost-of-living adjustment (COLA) since 2012 next
year. The improvement will lift the average monthly payment to an individual
from $1,422 to $1,461. The mean monthly payment to a retired couple will rise from
$2,381 to $2,448.5
T I P O F
T H E W E E K
Looking for more money to save or invest? You may find it by eating out less. If you spend $300 a month eating out, you could lower that to $100 a month and free up $2,400 a year to put into a retirement account or emergency fund.
THIS WEEK
On Monday, Bank of America reports Q3 results
and the Census Bureau releases its latest monthly retail sales snapshot. | BlackRock,
Comerica, CSX, Del Taco, Domino’s, J.B. Hunt, IBM, Infosys, Johnson &
Johnson, Morgan Stanley, Netflix, UnitedHealth, and W.W. Grainger all announce
earnings Tuesday. | Minutes from the Federal Reserve’s September policy meeting
surface Wednesday, along with data on September housing starts and building
permits and earnings from Abbott Labs, Alcoa, Kaiser Aluminum, Kinder Morgan,
Northern Trust, Union Bank, U.S. Bank, United Rentals, and Winnebago. | American
Express, Bank of New York Mellon, BB&T, Blackstone Group, Celanese,
E*Trade, KeyCorp, Novartis, Nucor, PayPal, Philip Morris, Snap-On, Sonoco,
Textron, Travelers Companies, and WD40 present earnings Thursday, when the
latest initial jobless claims figures also appear. | Friday, Honeywell,
Manpower, Procter & Gamble, Schlumberger, State Street, SunTrust, VF
Corporation, and Volvo offer earnings news, and September existing home sales
data emerges from the National Association of Realtors.
Q U O T E O F T H E W E E K
“The most important thing in life is to
learn how to give out love and how to let
it come in.”
MITCH ALBOM
|
%
CHANGE
|
Y-T-D
|
1-YR
CHG
|
5-YR
AVG
|
10-YR
AVG
|
|
DJIA
|
2.51
|
10.94
|
13.26
|
16.99
|
|
NASDAQ
|
8.60
|
13.73
|
19.54
|
30.65
|
|
S&P
500
|
3.50
|
8.48
|
12.49
|
17.58
|
|
REAL
YIELD
|
10/12
RATE
|
1 YR
AGO
|
5 YRS
AGO
|
10
YRS AGO
|
|
10 YR TIPS
|
1.03
|
0.44
|
0.50
|
2.97
|
Sources: wsj.com, bigcharts.com, treasury.gov - 10/12/182,6,7,8
Indices are unmanaged, do not incur fees or
expenses, and cannot be invested into directly. These returns do not include
dividends. 10-year TIPS real yield = projected return at maturity given
expected inflation.
T H E W E E K L Y
R I D D L E
It gives you information
and control, and without it, no work can be done – yet it costs you nothing. What is it?
LAST
WEEK’S RIDDLE: They can pass through state after state, all while never moving.
What are they?
ANSWER:
Interstate highways.
Troy L Thompson, CFP may be
reached at 515-432-5421 or troy@thompsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
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product or service, and should not be relied upon as such. All market indices
discussed are unmanaged and are not illustrative of any particular investment.
Indices do not incur management fees, costs and expenses, and cannot be
invested into directly. All economic and performance data is historical and not
indicative of future results. The Dow Jones Industrial Average is a
price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ
Composite Index is a market-weighted index of all over-the-counter common
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Additional risks are associated with international investing, such as currency
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CITATIONS:
1 - thestreet.com/markets/stocks-on-wall-street-rebound-friday-14742963
[10/12/18]
2 - markets.wsj.com/us [10/12/18]
3 - marketwatch.com/story/housing-costs-nudge-inflation-higher-in-september-cpi-shows-2018-10-11
[10/11/18]
4 - briefing.com/investor/calendars/economic/2018/10/08-12
[10/12/18]
5 - kiplinger.com/article/retirement/T051-C001-S001-social-security-benefits-to-increase-in-2019.html
[10/11/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F12%2F17&x=0&y=0
[10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F12%2F17&x=0&y=0
[10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F12%2F17&x=0&y=0
[10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F11%2F13&x=0&y=0
[10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F11%2F13&x=0&y=0
[10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F11%2F13&x=0&y=0
[10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F13%2F08&x=0&y=0
[10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F13%2F08&x=0&y=0 [10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F13%2F08&x=0&y=0 [10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F13%2F08&x=0&y=0 [10/12/18]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F13%2F08&x=0&y=0 [10/12/18]
7 -
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
[10/12/18]
8 -
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll
[10/12/18]
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